New IMF Head Blames Trade Conflicts for ‘Synchronized Global Slowdown’

October 8, 2019 by Dan McCue
New IMF Head Blames Trade Conflicts for ‘Synchronized Global Slowdown’
Kristalina Georgieva, the new head of the International Monetary Fund.

WASHINGTON  — Kristalina Georgieva, the new head of the International Monetary Fund, said Tuesday that the world economy is in the grips of a “synchronized global slowdown” fueled by ongoing trade disputes.

Speaking at the World Bank/IMF annual meetings being held in Washington, D.C. this week, Georgieva, a Bulgarian economist selected last month to succeed Christine Lagarde, warned that if left unresolved, these disputes will result in slower growth for 90% of the world this year.

“We have spoken in the past about the dangers of trade disputes,” Georgieva said. “Now, we see that they are actually taking a toll.”

Georgieva said escalating trade wars, like the one currently going on between the United States and China, could result in a loss of about $700 billion in output by the end of next year — 0.8% of world GDP.

“In this scenario, the whole economy of Switzerland disappears,” she said.

Georgieva announced the IMF will be downgrading its projections for global growth in 2019 and 2020 next week, when it releases new projections of the economic losses related to the trade war between the United States and China.

“Global trade growth has come to a near standstill,” she said. “In part because of the trade tensions, worldwide manufacturing activity and investment have weakened substantially.”

Even if growth picks up in 2020, the current rifts could lead to changes that last a generation — broken supply chains, siloed trade sectors, a ‘digital Berlin Wall’ that forces countries to choose between technology systems,” she added.

Perhaps striving to end on an upbeat note after painting such a dire picture, Georgieva said the only meaningful solution to trade conflicts will occur if countries agree to cooperate with one another.

“The key is to improve the system, not abandon it,” she said, adding, “Everyone loses in a trade war.”

A+
a-
  • economic slowdown
  • Economy
  • International Monetary Fund
  • Kristalina Georgieva
  • trade dispute
  • In The News

    Health

    Voting

    Economy

    Inflation Slowed Further in December as Economic 'Soft Landing' Moves Into Sharper Focus

    WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge cooled further last month even as the economy kept growing briskly, a... Read More

    WASHINGTON (AP) — The Federal Reserve’s preferred inflation gauge cooled further last month even as the economy kept growing briskly, a trend sure to be welcomed at the White House as President Joe Biden seeks re-election in a race that could pivot on his economic stewardship. Friday’s... Read More

    Americans' Economic Outlook Brightens as Inflation Slows and Wages Outpace Prices

    WASHINGTON (AP) — After an extended period of gloom, Americans are starting to feel better about inflation and the economy —... Read More

    WASHINGTON (AP) — After an extended period of gloom, Americans are starting to feel better about inflation and the economy — a trend that could sustain consumer spending, fuel economic growth and potentially affect President Joe Biden's political fortunes. A measure of consumer sentiment by the University of Michigan has... Read More

    Some Americans Will Get Their Student Loans Canceled in February as Biden Accelerates New Plan

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new... Read More

    WASHINGTON (AP) — The Biden administration will start canceling student loans for some borrowers in February as part of a new repayment plan that's taking effect nearly six months ahead of schedule. Loan forgiveness was originally set to begin in July under the new SAVE repayment plan, but... Read More

    In Milwaukee, Biden Looks to Highlight Progress for Black-Owned Small Businesses

    WASHINGTON (AP) — President Joe Biden is aiming to use a visit to the battleground state of Wisconsin on Wednesday... Read More

    WASHINGTON (AP) — President Joe Biden is aiming to use a visit to the battleground state of Wisconsin on Wednesday to spotlight a surge in federal government support for Black-owned small businesses during his White House tenure and to highlight his administration's efforts to ramp up... Read More

    Wall Street Rises on Hopes for Rate Cuts, as Dow Ticks Toward Another Record

    NEW YORK (AP) — Wall Street is ticking higher Thursday following its big rally the day before on excitement that... Read More

    NEW YORK (AP) — Wall Street is ticking higher Thursday following its big rally the day before on excitement that several cuts to interest rates may indeed be coming next year. The S&P 500 was 0.3% higher in morning trading and within 1.5% of its all-time... Read More

    Biden to Convene New Supply Chain Council, Announce 30 Steps to Strengthen US Logistics

    WASHINGTON (AP) — President Joe Biden on Monday will convene the first meeting of his supply chain resilience council, using the event... Read More

    WASHINGTON (AP) — President Joe Biden on Monday will convene the first meeting of his supply chain resilience council, using the event to announce 30 actions to improve access to medicine and needed economic data and other programs tied to the production and shipment of goods. “We’re determined... Read More

    News From The Well
    scroll top